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PRIF Report No. 140 the Japan’s Policy towards the South China Sea – Applying Proactive Peace Diplomacy? Reinhard Drifte

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PRIF Report No. 140

the

Japan’s Policy towards the South China Sea – Applying “Proactive Peace Diplomacy”?

Reinhard Drifte

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Peace Research Institute Frankfurt (PRIF) 2016 Contact: PRIF Baseler Straße 27–31 60329 Frankfurt am Main Germany Phone: +49 69 959104-0 Fax: +49 69 558481 E-Mail: [email protected] Website: www.rfwdrifte.ukgo.com www.prif.org

ISBN: 978-3-946459-09-5

10 €

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Summary

Japan’s policy towards the South China Sea (SCS) is likely to have a considerable bearing on the future shape of the regional order in this region although ultimately US-China competition and the reaction of the other countries around the SCS will have a more decisive bearing.

As China is reinforcing its claims to most of the SCS through political, economic, military and legal means, Japan has become more involved as one of the top world trading nations with considerable political, economic and strategic interests in Southeast Asia, as a security alliance partner of the US, and as a country which has territorial as well as Exclusive Economic Zone (EEZ) border disputes with China in the East China Sea (ECS).

This involvement has to be seen against the background of the general deterioration in the Japanese-Chinese relationship and lack of mutual trust which is due to not only the disputes in the ECS, but also to mutual suspicion generated by sharply diverging perceptions of military developments in the other country, the way Japan confronts its past aggression, and competitive if not antagonistic regional roles. China’s SCS policies therefore fit into Japan’s narrative of the “China Threat”, whereas Japan’s SCS policies fit into China’s narrative of Japan as a troublemaker at the side of the US.

The ultimate issue which this report attempts to address is whether Japan’ s policies, as part of Prime Minister Abe’s “proactive peace diplomacy”, can contribute to a reduction of tensions and to regional stability, or whether it will only exacerbate the situation as the Chinese government is adamantly asserting.

In the first part, this report analyses the various interests of Japan in the SCS region. Through trade and Foreign Direct Investment (FDI), Japan has established in Southeast Asia a so-called network economy. According to the U.S. Department of Energy, 85%–90% of Japan’s oil imports (roughly 75% of China’s oil imports), and 33% of Japan’s LNG imports pass through the sea lanes of communication (SLOC) of the SCS. The main natural resources of interest to Japan are fishing and energy resources. Important economic interests are related to Japan’s involvement in the off-shore (as well as on-shore) prospection and extraction of oil and gas resources in the SCS region in order to pursue the goal of diversification of supply of hydrocarbon as well as the marketing of Japan’s high technology services in the energy sector. Almost no attention has been given in the media or academic literature to this kind of Japanese involvement. However, some of the off-shore oil and gas blocks put out to tender by Vietnam, Malaysia, the Philippines, Brunei and Indonesia lie within China’s geographically ill-defined (no coordinates provided) and politically ambiguous (does it mark territorial waters, EEZ borders, or traditional fishing areas?) 10-dash line which overlaps with the EEZs and continental shelves claimed by these littoral countries. Still, Japan’s off-shore involvement is of a relatively modest scale, focusing on exploration and operating as part of joint ventures with bigger companies. With China’s growing military posture in the SCS, its improved technology, its increasing energy consumption and the increasing dependence of the littoral countries on China, however, Beijing may one day decide to move more

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resolutely against some of the littoral countries encroaching on what it considers to be its resources which would impact on these Japanese interests.

But not only economic interests but also geostrategic concerns have made the stability of the ASEAN member states of central importance to Japan. Next to Japan’s dependence on the freedom of navigation through the SCS, it is the nexus of its security alliance with the US and the interdependence of the security in the ECS and the SCS. Standing up to Chinese assertiveness in the SCS and supporting in some way the other littoral states of the SCS is perceived as necessary to maintain US support against Chinese policies in the ECS, i.e. the territorial dispute over the Senkaku/Diaoyu Islands and the unresolved EEZ border demarcation which have given rise to considerable tensions. This linkage has become an important rationale for Prime Minister Abe’s policy of creating the political and constitutional environment to deepen security cooperation under the bilateral Japan-US security treaty and to enhance Japan’s security policy as a “Proactive Peace Diplomacy”.

In the second part, this report gives an overview of Japan’s various multilateral, minilateral and bilateral policies to address its interests against a complex political, strategic and legal background. Until recently, Japan mostly contributed to stability of the region through economic means, i.e. trade, investment and Official Development Assistance (ODA), and through supporting ASEAN’s economic and political resilience and cohesion. In the face of China’s more assertive policies, the mirror perception of the tensions in the SCS and ECS, doubts among many Asian leaders about the reliability of the US commitment to balance the Chinese policies, and ASEAN’s fragmented position concerning the SCS, the economy-centred Japanese policies seem no longer to be sufficient and Japan is moving to switch to policies which put less emphasis on multilateral approaches and instead focus more on certain countries and on policies which are more security-related. The Japanese government has therefore started helping the more vocal SCS littoral states with their coast guard and military capacity. This enhanced security cooperation entails a stronger defence diplomacy, the use of ODA for coast guards, and naval support. The increased Japanese involvement in the security of the SCS has been very much promoted by the US through various new bilateral defence policy agreements but so far Japan has resisted proposals to join multilateral air or naval patrols in the SCS.

In the conclusions the report analyses political difficulties and costs in implementing Japan’s comprehensive policies towards the SCS, apart from enhanced security involvement being hindered by Japan’s still powerful pacifism, constitutional restraints and budgetary limitations. One difficulty for Japan’s involvement in the SCS is the divergence among the littoral countries regarding their security priorities and the mix of policy tools to confront China on the territorial issues. Another problem is subtle differences between Japan and the US in emphasis of what region is more important and where/how to deploy limited resources. Finally, there is China’s strong opposition to any country outside the SCS to oppose its advances in the region, and the political and military means at China’s disposal to deter Japan from hindering it. These means range from declaring high-level exchanges as inopportune, to raising military tensions in the ECS.

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The author concludes that the effectiveness of Japan’s SCS policies under Abe’s Proactive Peace Diplomacy in achieving Japan’s political, strategic and economic interests could therefore be enhanced by a more balanced mix of political, economic and security policies, most notably against a background of a better relationship between Japan and China. The high visibility of the security focus of Abe’s diplomacy towards the SCS is not helpful. In the end, however, the more determining factors for achieving regional stability in the SCS lie with the US-China relationship and the reactions of the other claimants to it.

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Contents

1. Introduction 1

2. Overview of the Current Situation in the South China Sea 3

3. Japan’s Interests in the South China Sea 4

4. Interdependence of the Security in the South China Sea and the East China Sea 5

5. Japan and the Natural Resources of the South China Sea 8

6. Japan’s Political and Economic Support of the Littoral South China Sea Countries 12

7. Bilateral Efforts and the Role of the Japanese Coast Guard 15

7.1 Philippines 16

7.2 Vietnam 18

7.3 Malaysia and Indonesia 18

7.4 Cooperation with Australia and India 20

8. Japan-US: Japan as “Assistant Balancer”? 20

9. Conclusions 22

Bibliography 27

Abbreviations 31

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“History has taught us that emerging powers are more likely to commit calamitous mistakes than other countries. China is offered many important strategic opportunities. Still, however, it is imperative for it to do everything possible to avoid plunging into the traps on its way for progress.”1

(Wang Jisi, President of the Institute of International Strategic Studies, Beijing University)

1. Introduction

The South China Sea (SCS) has become a showcase for how China is translating its considerable economic power into political and military power, and this development is also becoming a test case for the future of US regional supremacy and leadership and for what the Chinese government likes to call a new “big power relationship”. Japan’s policy towards the SCS is likely to have a considerable bearing on the future shape of the regional order in this region. As China is reinforcing its claims to most of the SCS through political, economic, military and legal means, Japan has become more involved as one of the top world trading nations with considerable political, economic and strategic interests in Southeast Asia, as a security alliance partner of the US, and as a country which has territorial as well as Exclusive Economic Zone (EEZ) border disputes with China in the East China Sea (ECS). This involvement has to be seen against the background of the general deterioration in the Japanese-Chinese relationship and lack of mutual trust which is due to not only the disputes in the ECS, but also to mutual suspicion generated by sharply diverging perceptions of military developments in the other country, the way Japan confronts its past aggression, and competitive if not antagonistic regional roles. China’s SCS policies therefore fit into Japan’s narrative of the “China Threat”, whereas Japan’s SCS policies fit into China’s narrative of Japan as a troublemaker at the side of the US. This wider context of Japan-China relations cannot be dealt with within the limits of this report which is focusing on Japan’s involvement in the SCS as one aspect of the difficult Japan-China relationship and on how the bilateral disputes in the ECS is impacting on Japan’s SCS policies.

Japanese policies for the SCS range from expressing a desire for a peaceful resolution of territorial and of administrative rights disputes based on international law, to helping some of the littoral states claiming territory and/or EEZs strengthen their maritime patrol and defence capabilities. There have even been public statements by American officials about the desirability of Japan becoming a member of joint air or naval patrols in the SCS.

This report analyses first the various interests of Japan in the SCS region, and secondly how the Japanese government tries to address them against a complex political, strategic and legal background. This does not include a discussion of the legitimacy of the

1 Wang 2015: vii.

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territorial and EEZ claims by either China or the other claimants, since Japan does not take any position on these issues.

So far Japan has mostly tried to contribute to stability of the region through economic means, i.e. trade and Official Development Assistance (ODA), and through supporting ASEAN’s economic and political resilience and cohesion. In the face of China’s more assertive policies in Asia, doubts among many Asian leaders about the reliability of the US commitment to balance these Chinese policies, and ASEAN’s fragmented position concerning the SCS, the gradual strengthening of Japan’s security policy is now also extending to Southeast Asia, particularly under Prime Minister Abe’s “proactive peace diplomacy”.2

This “proactive peace diplomacy” is a slogan which intends to describe a more accelerated abandonment of Japan’s relative passive past security policy which relied for the country’s external defence posture on the US off-shore (US 7th Fleet) and on-shore (i.e. US troops in Japan) force deployment, and modest Japanese armed forces as deterrent for small-scale attacks. In the face of North Korea’s increasing force deployment (notably medium and long range missiles with possibly nuclear war heads), Chinese increased force deployment, the US demands for more Japanese defence efforts to support US deterrence in Asia, and the desire of the Japanese Right under Abe to become a “normal” country (i.e. stronger security and military policies), the current government wants to abandon what it perceives as a hitherto “passive diplomacy”. A major obstacle for the government is the Japanese constitution where Japan proclaims to rely on the goodwill of the world for its security and existence (Preamble) and renounces in Article 9 the maintenance of all kind of military potential and the right of belligerency as a means to settle international dispute. Since this constitution is referred to as “Peace Constitution” (heiwa kempo) by the Left, the current government wants to facilitate public acceptance of its Realpolitik approach to security by appropriating “peace” in the slogan. This report provides therefore also a case illustration of how the current government implements a stronger security and military stance.

The ultimate issue which this report attempts to address is whether Japan’s SCS policies as part of the current government’s greater focus on security issues can contribute to a reduction of tensions and to regional stability, or whether it will only exacerbate the situation as the Chinese government is adamantly asserting. I will conclude that the effectiveness of Japan’s SCS policies will in the end partly depend on a well balanced mix of political, economic and security policies which can convince all players of the dangers and pitfalls of power balancing, as well as on better relations between Japan and China. However, in the face of China’s unrelenting SCS policy and attempts to use the bilateral ECS disputes as a lever to counter Japan’s SCS involvement, Japan’s options and impact

2 For a detailed discussion of “Proactive Contribution to Peace” see Abe 2014. On Japan’s strengthened

security policy see Hughes 2015.

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are rather limited. More decisive will be the US-China relationship and how the littoral countries will react to it.

2. Overview of the Current Situation in the South China Sea

According to the official Chinese position, all islands and reefs within the official Ten-dash line (formerly known as Nine-dash line) as well as “the surrounding sea” belong historically to China.3 However, this position is at odds with the UN Convention on Law of the Sea (UNCLOS) which does not recognise any “historic rights” in such a context, the term “the surrounding sea” is vague and not part of the UNCLOS vocabulary, and the Ten-dash line has not been given any precise coordinates or meaning.4 The other claimants to parts of the SCS do not agree and have also overlapping claims with other littoral claimant states. However, there is no unified stance of the other claimants against China and their stances ranges from officially even denying any territorial conflict with China (Malaysia, Indonesia) to actively pursuing their claims (Philippines, Vietnam). Moreover, the littoral states of the SCS are divided on how strongly to confront China’s territorial position and its coercive behaviour towards some of the claimants because of domestic and foreign policy considerations and China’s growing economic importance. China opposes any multilateral talks on territorial issues despite the overlapping claims, thus increasing its negotiation power. Finally China rebuffs the involvement of any non-littoral state, notably of the US and Japan. This complex situation alone makes it very difficult for any outside country to play a constructive role and to safeguard its political, economic and security interests.

At the same time, China is asserting its territorial claim to most of the SCS in an increasingly assertive way – politically, economically, legally, and through policing and military means. It has created a new administrative unit to encompass part of the SCS (establishment of Sansha City in 2012), and established there fishing zone regulations which it enforces on all countries. Chinese companies have started to explore oil and gas resources in areas which are claimed by other littoral countries and China’s maritime militia and People’s Liberation Army (PLA) forces protect these ventures. Currently the greatest attention is raised by China’s extensive reclamation projects in eight locations across the Spratly Islands which are feared to lead to the establishment of military bases and a more efficient implementation of China’s territorial claims. Although China claims that these reclamation projects are finished, aerial observation proves the contrary. Regional and other outside powers fear that China will continue to cement its territorial claim by economic activities (fishing, tourism), further creating artificial islands (including floating islands), and that its reclamation activities would lead to the 3 For the 10-dash line see State Oceanic Administration 2012: 381. 4 For an official Chinese justification of “historical rights” in the SCS based on customary law rather than

UNCLOS see Foreign Ministry Spokesperson Hong Lei’s Regular Press Conference on 6 July 2016, http://bit.ly/2dUSFAZ.

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establishment of an Air Defence Identification Zone (ADIZ), the creation of an exclusive fishing zone and finally threatening the freedom of navigation in a sea which is essential to the economy of many countries, including Japan’s. In view of China’s rather aggressive fishing activities (as Japan experienced e.g. in 2014 with Chinese fishing trawlers going for the protected red corals in Japan’s EEZ around the Ogasawara Islands) and the extremely extensive reclamation activities, there is also considerable concern about the environ-mental impact of China in the SCS. Vietnam, the Philippines, Malaysia and Taiwan have in the past all undertaken reclamation works on features occupied by them and built facilities. However, the current tensions arise from the incomparable scope and speed of China’s reclamation activities, the growing militarization of its controlled features, and the disputed compatibility of its claims and procedures with international maritime law. The general concern is that China will proceed in small steps (bu bu wei ying, 步步为营) which individually may not generate a strong reaction from other concerned countries, but will in the end create a “Chinese Lake” where the Freedom of Navigation (FON) and the economic interests of all other countries might be considerably diminished. This incremental process of China’s salami or cabbage tactic has also been referred to as dou er bu po (斗而不破): to struggle but without breaking (Lin 2015).

3. Japan’s Interests in the South China Sea

Japan’s interest in the South China Sea goes back to the 1920s, first starting with private businesses exploiting guano from some parts of the Spratly area, and ending with claiming sovereignty over the whole Spratly area after the occupation of Hainan in February 1939. As Tonnesson puts it, from 1942 to the beginning of 1945, the SCS was a Japanese lake (Tonnesson 2006: 16). But in the San Francisco Peace Treaty of 1951, Japan renounced in Art. 2 (f) “all right, title, and claim to the Spratly Islands and to the Paracel Islands”. One interesting point of this renunciation is that the treaty does not say anything to whom the two island groups reverted which today absolves Japan from being bound by any territorial claim of the various disputants (Hara 2015: 48).

After the Pacific War, Japan initially re-entered the region only economically through a succession of reparation treaties with several Southeast Asian countries which first led to a focus on extracting raw materials and energy, followed by building up manufacturing complexes which created a network economy. Japan’s security interest in the SCS area began with its concerns about the stability of ASEAN from the 1970s onwards (Vietnam War), followed by concerns about safe shipping through the Malacca Strait, and in the 1990s with its concerns about piracy. The stability of the ASEAN member states has become of central importance for its geostrategic value and for Japan’s external trade. According to the U.S. Department of Energy, 85%–90% of Japan’s oil imports (roughly 75% of China’s oil imports), and 33% of Japan’s LNG imports pass through the sea lanes of communication (SLOC) of the SCS Africa (U.S. Energy Information Administration 2013: 3; Herberg 2016). Japanese war ships are passing regularly through the SCS, stopping often in Singapore, on their way to and from the anti-piracy operations on the east coast.

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In the following I will analyse how the Japanese government is perceiving a link between the confrontation in the ECS – with its undetermined EEZ borders and the territorial dispute over the sovereignty of the Senkaku/Diaoyu Islands –, and the SCS. A further link explored is the extent to which these conflicts are related to Japan’s new security legislation and Prime Minister Abe’s concept of Japan to become a “Proactive Contributor to peace”.

4. Interdependence of the Security in the South China Sea and the East China Sea

Around 2009–2010, tensions started to rise in the SCS as well as in the ECS.5 While China became more assertive notably towards Vietnam and the Philippines, the Chinese fishing boat incident around the Senkaku/Diaoyu Islands in 2010 led to a severe crisis in Japanese-Chinese relations, followed by an even longer lasting fallout after the Japanese government’s purchase of three islands of the disputed ECS islands.6 The Japanese side could not fail to see here some parallel developments and concluded that standing up to Chinese assertiveness in the SCS and supporting in some way the other littoral states would be helpful in defending its stakes in the ECS.7 Moreover, the US became more outspoken in voicing its concern about the freedom of navigation and the necessity of a peaceful resolution of conflicting territorial claims in both seas. It was therefore in Japan’s interest to be seen as supporting the same principles in order to sustain US support for Japan in the ECS. Although the US does not take any position either on territorial claims by any claimants in either regions, it has reconfirmed several times, and President Obama was the first US President in April 2014 to do so, that the Senkaku/Diaoyu Islands fall under the security guarantee of Article 5 of the bilateral Japan-US Security Treaty.

Another link for the current Japanese government between the SCS and the ECS is Prime Minister Abe’s policy of creating the political and constitutional environment to deepen security cooperation under the Japan-US security treaty and to enhance thus Japan’s security policy as a “Proactive Contributor to Peace”.8 The implementation of this security policy means concretely a greater Japanese involvement in international and notably regional security (e.g. slightly expanding Japan’s military budget, allowing the export of arms, reducing limits on Japanese contribution to UN peace keeping operations, etc.) as well as deepening Japan-US security cooperation. To this effect, the government has passed in 2015 thanks to its parliamentary majority several laws. In the parliamentary

5 For the rise of tensions in the SCS see Pajon 2013: 10f. 6 For a detailed analysis of these two crises see Drifte 2014. 7 Lam Peng-Er argues that Japan has seen the two regions interrelated since China passed its “Law on

Territorial Waters and Contiguous Areas” in 1992 which mentioned the disputed islands in the ECS as well as the SCS as integral part of China’s territory (Lam 1996: 1000).

8 For an overview of these new security policies and legislative acts see Maslow 2015: 739ff.

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discussion about the security laws of 2015, the government referred explicitly to the rising tensions in the ECS as well as SCS to justify the need for this new legislation.9

Under Prime Minister Abe in particular, Japan has become increasingly outspoken about China as a challenge if not threat to Japan’s security, and the main reason for this concern is the perceived intention of China to change the territorial status quo by coercion not only in the ECS but also in the SCS. In December 2013, the new Abe government issued its first National Security Strategy which refers to the SCS as follows:

“In the South China Sea in particular, disputes that have arisen over sovereignty between coastal states and China cause concern over the maintenance of the rule of law at sea, freedom of navigation, and stability in the Southeast Asian region. In addition, vulnerability is also increasing in sea lanes of communication, spanning between Japan and the Middle East, on which Japan is largely dependent for its natural and energy resources, due to various problems including regional conflicts and international terrorism in and around coastal states, as well as piracy.” (National Security Strategy 2013: 8f)

And further on, the document says:

“China has taken actions that can be regarded as attempts to change the status quo by coercion based on their own assertions, which are incompatible with the existing order of international law, in the maritime and aerial domains, including the East China Sea and the South China Sea.” (National Security Strategy 2013: 12)

The security concerns of Japan regarding the SCS have increased with the huge reclamation work on some features which started in 2014. In June 2015, Defence Minister Nakatani Gen linked the SCS to Japan’s security concerns in the ECS by warning that the reclamation work could lead to an expanded Chinese military presence in the area which in turn might hinder US troops from coming to assist Japan in case of contingencies in the ECS.10 This security concern was reinforced by Nishi Masanori, former vice defence minister and now political adviser of Nakatani, warning that the creation of new islands has military purposes, including the instalment of radars and air defence missiles, and that China might declare an ADIZ over the SCS as it did in November 2013 over the ECS.11 This narrative of the ECS-SCS link has also led to the threat scenario by Defence Minister Nakatani that the continuous Chinese development of hydrocarbon resources in the ECS (i.e. the increase of platforms) in the as yet not demarcated EEZ might lead to China deploying a radar system or heliports.12 In August 2016 the Japanese government reported that the Chinese side had installed radar on one of the 16 gas drilling platforms

9 Giulio Pugliese has described the close link between Abe’s security laws in 2015 and the tensions in the

SCS and the ECS: Pugliese 2016: 102f. 10 NHK, 9 June 2015 (the articles quoted from the website NHK are no longer accessible but available from

the author; all dates of the articles are the dates of access). 11 Japan Times, Japanese Official Warns that South China Sea Activities May Be Precursor to ADIZ, 15

December 2015, http://bit.ly/29ta1yY. 12 Mainichi Shimbun, 24 July 2015 (the articles quoted from the website Mainichi Shimbun are no longer

accessible but available from the author; the date of the article is the dates of access). For a critical view of this scenario see Panda 2015.

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in the contested area of the ECS.13 The Chinese side explained this infrared radar as necessary for the safety of the platform, apart from refuting any right by Japan to intervene in waters under Chinese jurisdiction.14

Concern about the security implications of China’s reclamation work prompted conservative Liberal Democratic Party parliamentarians to insist that the 2015 White Paper of Japan’s Defence was to include aerial photographs of China’s island-building in the SCS as well as Chinese oil and gas platforms in the ECS.15 As a result the White Paper included photos of the reclamation on Johnson South Reef and the Subi Reef.16

Prime Minister Abe outlined three principles for his understanding of the rule of law:

“The first principle is that states shall make and clarify their claims based on international law. The second is that states shall not use force or coercion in trying to drive their claims. The third principle is that states shall seek to settle disputes by peaceful means.” (Abe 2014)

To spread this narrative of the rule of law and to press its interpretation of the law of the sea, the Japanese government has been striving to include references to it in the statements made at the end of international meetings like the G7. The Ministry of Foreign Affairs organised in 2014 and 2015 international conferences on the law of the sea in both the ECS and SCS regions.17 The government is also supporting the arbitration award by the Arbitral Tribunal Constituted under Annex VII to the 1982 United Nations Convention on the Law of the Sea (hereafter referred to as the Arbitral Tribunal) of 12 July 2016 and calls for the adherence by both parties, the Philippines as well as China:

“2. Japan has consistently advocated the importance of the rule of law and the use of peaceful means, not the use of force or coercion, in seeking settlement of maritime disputes.

3. As the Tribunal’s award is final and legally binding on the parties to the dispute under the provisions of UNCLOS, the parties to this case are required to comply with the award. Japan strongly expects that the parties’ compliance with this award will eventually lead to the peaceful settlement of disputes in the South China Sea.” (Ministry of Foreign Affairs 12 July 2016)

Although China does not tire to state that its increasing security role and notably the huge reclamation work in the SCS have no negative consequences for the Freedom of Navigation, it is obvious that to Japan’s policymakers and observers, but also to those of

13 Japan Times, 7 August 2016, http://bit.ly/29ta1yY. 14 NHK, 9 August 2016 (the articles quoted from the website NHK are no longer accessible but available

from the author; all dates of the articles are the dates of access). 15 LDP Defence Committee delays approval of Defence White Paper because “Description of China’s moves

are insufficient” (Jiminto Kokubo Bukai [Chugoku no ugoki ni kansuru kijutsu ga fujubun] to Boei Hakusho no ryosho miokuri), Sankei Shimbun, 7 July 2015, http://bit.ly/2dx668i.

16 Thanks to Giulio Pugliese I discovered that originally six photos of these reefs appeared in the first version of the White Paper which is now only retrievable through a web archive site (http://bit.ly/2cLdlco, p. 6), but the currently available website of the Ministry of Defense has only two photos of Fiery Cross Reef in 2014 and in 2015, in: Ministry of Defense (Japan) 2015: 47.

17 For relevant documents of the conferences in 2016 and 2015 see http://bit.ly/2d1ZS25 and http://bit.ly/2cpvL5L.

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other countries, the experience of China’s escalating steps in the ECS and its opposition to international arbitration is rather worrying. The Singaporean defence minister in June 2016 summoned up the concerns of many regional players when he stated:

“[…] the Chinese has (sic) assured the freedom of navigation and freedom of overflight. But no responsible government can approach this on the basis that ‘Let’s hope that nothing happens even though the tensions are up.’ So we do pay attention to it.”18

As we have seen above, the Japanese government’s narrative of linking China’s SCS and ECS activities has certainly contributed to a hardening of Tokyo’s perception of these activities, but its SCS countermeasures go beyond “paying attention” as we will see in the last three parts of this report.

5. Japan and the Natural Resources of the South China Sea

The main natural resources in the SCS of interest to Japan are fishing and energy resources. As a major consumer of fish, the SCS’s fishing resources are a considerable economic interest for Japan. Moreover, the Japanese government is very well aware of the importance of fishing resources for the countries around the SCS. Most of Japan’s fishing resources from the SCS seem to be imported from the littoral countries, including from Chinese fishing companies operating in the SCS, rather than acquired through its own fishing fleet (Gang 2016). When China imposed unilateral fishing rules in the SCS through the prefectural government of Hainan (according to official position Hainan is in charge of administering the SCS), the Japanese government protested in January 2014.19

More important economic interests are related to Japan’s involvement in the off-shore (as well as on-shore) prospection and extraction of oil and gas resources in the SCS region in order to pursue the goal of diversification of supply of hydrocarbon as well as the marketing of Japan’s high technology services in the energy sector. These energy interests have so far not found any attention in the limited English language literature on Japan’s policy towards the SCS.20 However, some of the off-shore oil and gas blocks put out to tender by Vietnam, Malaysia, the Philippines, Brunei and Indonesia lie within China’s geographically ill-defined (no coordinates provided) and politically ambiguous (does it mark territorial waters, EEZ borders, or traditional fishing areas?) 10-dash line which overlaps with the EEZs and continental shelves claimed by these littoral countries.21 Prospection and exploitation by Japanese energy companies (including also by

18 Kyodo, 30 June 2016 (the articles quoted from the website of Kyodo are no longer accessible but available

from the author; all dates of the articles are the dates of access). 19 Kyodo, 17 January 2014 (the articles quoted from the website of Kyodo are no longer accessible but

available from the author; all dates of the articles are the dates of access). 20 See e.g. Pajon 2013; Midford 2015; Pugliese 2016. 21 For a Chinese point of view concerning China’s rights to all oil and gas resources within the 10-dash line

see Li Guoqiang 2015.

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Vietnamese and other international companies) in the contested waters between Vietnam and China and between the Philippines and China (no Japanese involvement in the latter) are the only cases which have so far been targeted by Chinese protests. However, China’s growing political and military assertiveness in the SCS may lead to a stronger response in the future. As Li Guoqiang, a senior researcher of the Chinese Academy of Social Science, put it in the journal of the Chinese International Institute for International Studies, the think tank of the Chinese Ministry of Foreign Affairs:

“Since the 1970s, China’s neighboring countries in the South China Sea region have signed 428 cooperative agreements with third party oil companies in the South China Sea, with 188 of these agreements being partially or totally within China’s dotted line. As a result, the equivalent of 5,000 tons of oil have been plundered from China’s dotted line every year. This trend is unabatedly gaining momentum.” (Li Guoqiang 2015: 10)

Map of some oil/gas fields involving Japanese companies within or near China’s 10-dash line22:

22 Based on the map provided by d-maps.com (www.d-maps.com/carte.php?num_car=32143&lang=de)

adapted by Peter Kreuzer.

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In the case of Vietnam, Japan reached an agreement as early as 1978 about the development of hydrocarbon resources in the SCS and in July 1994, Vietnam ratified UNCLOS (before China or Japan did so!) which entitles states with sea borders to an EEZ and – according to topographical circumstances – to a continental shelf. However, according to leaked US diplomatic cables released by Wikileaks, China pressured international oil companies as early as 2006 not to sign exploration contracts with Vietnam. These companies included Chevron, Exxon-Mobil, ConocoPhillips, British Petroleum (BP), Malaysia’s Petronas but also Idemitsu Oil & Gas Corp. from Japan. All were told that such contracts would violate China’s sovereignty (Simon 2012: 1001f).23 Still, Japanese companies and those of other countries are still active in the contested sea areas. The following blocks/fields which had/have Japanese companies involved are either close to or clearly within China’s ill-defined 10-dash line as can be seen on the online IHS map24:

Block 122: Mitsui Oil Exploration Co (MOEC) 2006–2012 (2007 PRC) protest against Chevron (Do Thanh Hai 2014: 98).

Block 04/3: Idemitsu Oil & Gas Co. until 2007; from 2014: a Japanese bank involved in a multilateral loan consortium (led by the Taiwanese Bank Cathay United Bank!) for pipeline construction from several gas fields, including Block 04/3, to Vung Tao (Vietnam mainland).25

Block 05-1b&c (Daihung field): Idemitsu Oil & Gas Co in 2005 established Production Sharing Contract with JX Nippon Oil Exploration (now JX Nippon Oil & Gas Exploration) and Teikoku Oil Co. and Petrovietnam (PRC protest in 2007). Ongoing (Energy Key Facts 2015: 16).

Block 05-2, 05-3: Idemitsu Oil & Gas Co. sold out in 2007 because of PRC pressure on the majority shareholder BP; contract in 2015 between Rosneft (Russia) and Japan Drilling Corp. to deploy “Hakuryu 5”, a semi sub, for exploration drilling in Block 05-3/11 and Block 06-1.26

In the case of Indonesia, it is the prospection and production of hydrocarbon resources in the area of the Natuna Islands (belonging to the Riau province of Indonesia) which may give rise to problems with China. One of Indonesia’s biggest gas field in the area, D-Alpha Block, is clearly within China’s 10-dash line. Until now it seems that the PRC has not publicly protested any Indonesian hydrocarbon activities there, but Beijing’s position regarding Indonesia’s EEZ claim around the Natuna Islands which partly overlaps with the 10-dash line is rather ambiguous. The Indonesian government does not recognise China’s ten-dash line as having any international legal basis (Jayakumar et al. 2014: 148). 23 For more information on these Chinese protests see Do Thanh Hai 2014: 98; Tran Truong Thuy 2011. 24 For the IHS map of all the blocks along the Vietnamese coast and their geographic relation to the 10-dash

line see: http://files.hoangsa.net/Downloads/12866-vn06e2gen.pdf (the link is no longer accessible but available from the author).

25 Talk Vietnam.Com, Vietsovpetro Presses on Despite Price Slump, 2 July 2014, http://bit.ly/2cF0czT. 26 www.rosneft.com/news/pressrelease/040920155.html

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Although China as well as Indonesia officially proclaim that there is no territorial conflict, Chinese authorities intervened forcefully in 2016 when Indonesian authorities arrested Chinese fishermen in the Natuna area, claiming “traditional fishing rights”. It is unclear whether that will also extend to hydrocarbon resources. The following Japanese companies are involved in Indonesian blocks which seem to be inside the 10-dash line:

Tuna Block: MOEC has a 20% share.27

South Natuna Sea Block B (South & North Belut): INPEX has a share of 35%.28

In the case of Malaysia and Brunei, Japanese companies are involved in the following blocks which are north of the island of Borneo and clearly within the 10-dash line which runs rather close to the northern coast of the island:

Deep Water Block R: JX Nippon Oil & Gas exploration.29

Deep Water Block S: JOGMEC provides equity financing to INPEX Offshore North West Sabah Ltd (Offshore Energy Today 2015).

Gas Fields of Serai, Saderi, Jintan, SK8, Bijan, Cilipadi, Helang, Layang: JX Nippon Oil & Gas involved in exploration with other Japanese partners. 30 Moreover, Mitsubishi and Nippon Oil are participating in three on-shore LNG complexes (Satu, Dua and Tiga) which get their gas from fields within China’s claimed sea area.31 In 2006, the Tiga LNG complex signed a 25-year contract to supply LNG to Shanghai.32 Thus in effect Japan is involved in supplying gas from a Malaysian field inside the 10-dash line!

Japanese companies are heavily involved in the on-shore gas production of Brunei. Off-shore, Mitsubishi has a share of 6.25% in the Block CA2 (Gas) which is most likely overlapping with China’s 10-dash line.33

Apart from protests about Vietnamese and Philippine oil and gas fields, China has not officially protested the activities of non-Chinese companies in SCS off-shore fields which are within the 10-dash line despite the complaints in some official literature (Li Guoqiang 2015). In the case of Malaysia, China is even one of the main buyers of the gas produced within the 10-dash line area (Kreuzer 2015: 9).34 It is obvious that the Chinese govern-ment does not yet consider the time having come to clarify the exact coordinates and

27 www.moeco.com.jp/en/project/asia.html. 28 www.inpex.co.jp/english/business/indonesia.html. 29 www.nex.jx-group.co.jp/english/activity/southeast_asia/malaysia_map01.html. 30 www.nex.jx-group.co.jp/english/activity/southeast_asia/malaysia.html. 31 Email from Peter Kreuzer 13 June 2016. 32 http://bit.ly/29JK5RB; http://bit.ly/29JK5RB. 33 http://bit.ly/29sMz5L. 34 For an interesting interpretation of China’s motives to treat the littoral SCS states differently see Kreuzer

2015.

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political meaning of the 10-dash line and to intervene against foreign companies. On the other hand, the littoral countries take care to have the world’s biggest energy companies involved and/or to spread their geographic provenance (e.g. US, Russia, and India) when exploiting the energy resources in the SCS.

The involvement of Japanese companies is, as we have seen, of a relatively modest scale, focusing on exploration and operating as part of joint ventures with bigger companies. With China’s growing military posture in the SCS, its improved technology, its increasing energy consumption (e.g. the preference for the use of natural gas as a less polluting alternative to coal) and the increasing dependence of the littoral countries on China, however, Beijing may one day decide to move more resolutely against some of the littoral countries encroaching on what it considers to be its resources as is clearly spelled out in Li Guoqiang’s article. This is already the case concerning fishing rights within the 10-dash line as is demonstrated by the increasing number of fishing incidents not only with Vietnam and the Philippines, but now also with Malaysia and Indonesia which so far had been eager to play down any friction with China and which are now more aggressively asserting fishing rights against what they consider illegal fishing in their waters by not only China but also other littoral countries (Cochrane 2016).35 If China changes tack, Japan may become a target of Chinese countermeasures, either as a retribution for Japan’s SCS policy and/or warning to Japan regarding the conflict in the ECS. Some of these Japanese explorations have Japanese government backing, e.g. by the Japan Oil, Gas and Metals National Corporation (JOGMEC) which is under the jurisdiction of the Ministry of Economy, Trade and Industry (METI). Any Chinese pressure on this company would therefore directly involve the Japanese government.

6. Japan’s Political and Economic Support of the Littoral South China Sea Countries

Japan has traditionally supported the littoral states of the SCS as part of its policy to strengthen the political and economic resilience and cooperation of ASEAN. As important markets, sources for raw materials and destination of Japanese Foreign Direct Investment (FDI), the littoral states of the SCS and the members of ASEAN in general have been and continue to be major recipients of Japanese ODA (Official Development Assistance), be it loans, grants or technical aid. Particularly under Prime Minister Abe, the ASEAN members have become an important part of Japan’s new “minilateral” security partnerships. As John Nilsson-Wright and Fujiwara Kiichi point out, the focus on ASEAN members stands out as is e.g. seen in the frequency of Abe’s overseas visits:

35 South China Morning Post, Philippines Detains Chinese, Vietnamese Fishermen for Suspected Poaching,

17 May 2016, http://bit.ly/1Xx0lZg; Kyodo, 29 March 2016 (the articles quoted from the website of Kyodo are no longer accessible but available from the author; all dates of the articles are the dates of access).

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“While the US and Australia can provide the muscle in terms of military hardware and alliance support to deter China, ASEAN provides critical political support and legitimacy to Japan’s efforts to balance against China’s rise.” (Nilsson-Wright/Fujiwara 2015: 9)

From 1960 to 2011 Japan provided 35% of global ODA going to the ASEAN countries. In the case of Vietnam, the Philippines, Malaysia and Indonesia, Japan is the no. 1 ODA donor among all the member states of the Development Assistance Committee (DAC) of the OECD. The Philippines as a crucial littoral state is particularly benefiting from Tokyo’s largesse: In 2015, Japan provided to the Philippines a loan of roughly $2 billion to build a railway line which is the single largest ODA commitment by Japan to an overseas development partner. Moreover, this railway project was originally to be financed by China but the Philippine senate cancelled it amidst corruption charges (Nonato 2015).

Amount of DAC Countries’ and International Organizations’ Gross ODA Disbursements (in billion $)36

Vietnam Philippines Malaysia Indonesia 2009 1,414 0,684 0,240 1,415 2010 1,117 0,686 0,143 1,593 2011 1,368 0,414 0,198 1,030 2012 2,035 0,436 0,208 0,822 2013 1,680 0,256 0,144 0,968

With Japan’s slow move to maritime awareness, security considerations have become more prominent in its ODA policy. In February 2015, the Japanese government revised for the first time since 2003 the Development Cooperation Charter which is to help Japan make a “proactive contribution to the peace, stability and prosperity” of the world and now allows the use of ODA to protect its national interests in view of changing global environment which was clearly also inspired by the rising tensions in the SCS. In the ODA White Paper published in 2016, mention was made of strengthening the rule of law, maritime security, cybersecurity and peace-building measures (Mie/Johnson 2016; Ministry of Foreign Affairs 2015: 132).

Precursor to Japan’s current security support of the littoral SCS states are its past efforts to establish mechanisms for regional cooperation which contribute to the safety of shipping as well as regional stability. In consideration of Japan’s past aggression in the region as well as Japan’s constitutional restraints, these efforts were initially embedded in multilateral frameworks and devoid of military security aspects. The earliest example is the safety of the Malacca Strait through which most of Japan’s oil from the Middle East passes. Japan was instrumental in establishing the Malacca Straits Council in July 1968 and in funding its operations. Japan was also an initiator of what became in 1994 the ASEAN Regional Forum, the first Southeast Asian government institution to discuss 36 Ministry of Foreign Affairs (Japan) 2016: Japan’s ODA Data by Country, http://bit.ly/2d30JhM.

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security issues (Midford 2015: 530). Japan supported also ASEAN’s efforts for the 2002 Declaration on Conduct in the SCS. However, despite strong Japanese backing, a binding Code of Conduct for the SCS has still not been concluded mainly due to Chinese foot-dragging and ASEAN’s disunity. As a result of the increase of piracy and armed robbery in the SCS area, Japan became since 2000 a sponsor of regional responses to this problem and provided capacity building, technical assistance and equipment. These efforts finally led to the 2004 Regional Cooperation Agreement on Combating Piracy and Armed Robbery Against Ships in Asia (ReCAAP) and the establishment in September 2006 of the ReCAAP Information Sharing Center in Singapore of which Japan is after Singapore the largest financial supporter (Midford 2015: 534).

Piracy is still a major concern for Japan as well as all other nations which use the sea lanes of communication in the SCS. According to the International Maritime Bureau’s (IMB) Piracy Reporting Centre, piracy, including attempted theft and hijackings, continues to be a threat to tankers in the Strait of Malacca. In 2008 alone, there were 13 actual attacks on vessels underway in southern area of South China Sea. According to latest data published by IMB, in 2010, there were in total 36 actual and attempted attacks in the Strait of Malacca, Singapore Straits and South China Sea. This number rose substantially to 44 in 2011 and 90 in 2014 respectively according to the latest statistics published by ReCAAP ISC Annual Report. Piracy and armed robbery hence still remain a big threat (Chen/Xu 2015: 6).

In November 2011 at the East Asian Summit in Bali, the then Prime Minister Noda proposed the expansion of the ASEAN Maritime Forum to more members, including the US. In 2012 ASEAN expanded the Forum which now includes the members of the East Asian Summit (Midford 2015: 538). This 1.5-track dialogue discusses the issue of conflicting claims in the region, the relevance of UNCLOS for maritime security, maritime connectivity and capacity building in infrastructure and equipment (Pajon 2013: 17). Another regional forum supported by Japan is the ASEAN Defence Ministers Meeting (ADMM) which has also expanded to include extra-regional members as dialogue partners (ADMM+). All these fora include now China as well and it is the hope not only of Japan that this will help to “socialize” China and better acquaint it with international norms and rules.

Following up from a proposal made by Prime Minister Abe in May 2014, the government started to organise seminars on capacity building in maritime security for defence and foreign affairs officials from ASEAN countries. These seminars aim to explain Japan’s new security legislation, the government’s maritime security assistance to ASEAN and the defence technologies relevant to maritime security produced in Japan (Ministry of Foreign Affairs 16 December 2015).

It is obvious that Japan’s multilateral efforts and encouragements have also become part of the larger Japan-China rivalry which is particularly visible when it comes to shaping economic regionalism. China has been faster than Japan in concluding bilateral FTAs with individual ASEAN member states as well as with ASEAN as a whole. Japan is promoting a more open regionalism whereas China prefers to focus on Asian countries and tries to exclude the US. Japan aims at more comprehensive so-called Economic

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Partnership Agreements whereas China concludes FTAs without dispute settlement mechanisms and more exclusions of sensitive items. The latest battleground for this Japan-China competition is the Chinese proposal for the Asian Infrastructure Investment Bank (AIIB) of which Japan – in contrast to many Western countries except the US – has not yet become a member while establishing at the same time its own Partnership for Quality Infrastructure which is also to compete with China’s wider One Belt One Road project (Mazza 2015).

7. Bilateral Efforts and the Role of the Japanese Coast Guard

The support of multilateral efforts concerns only very issue-specific measures (safety of navigation; piracy) and is less effective in addressing the most important issue of opposing territorial claims, or the connected issues of China’s military buildup and its huge reclamation efforts. China is adamantly opposed to discussing the territorial dispute on a multilateral level. While delaying any progress towards a binding Code of Conduct, China continues with its hydrocarbon prospection, military expansion, reclamation and occupation of maritime feature in the SCS. Moreover, ASEAN is not speaking with one voice and it is easy for China to lean on weaker states such as Cambodia or Laos to prevent any deeper discussion of the SCS in the above-mentioned fora and meetings.

Celine Pajon expressed therefore a wide-spread feeling in Japan, the region as well as other Western countries about the lack of progress despite many fora and dialogues in ASEAN:

“Nothing of real consequence emanates from these arrangements and such consensus-based settings tend to be rather counter-productive on the long run. They may give pre-eminence to reluctant players and give birth to only bottom-line agreements.” (Pajon 2013: 14)

The Japanese government has therefore started already under the Noda administration to put greater emphasis on helping the more vocal SCS littoral states with their coast guard and military capacity and what is nowadays referred to as “maritime domain awareness”.37 This enhanced security cooperation entails a stronger defence diplomacy, the use of ODA for coast guards, and naval support. Between 1995 and 2011 already, JICA received the greatest number of trainees for its coast guard training programme from four S.E. Asian countries: Philippines (90), Indonesia (86), Malaysia (70) and Vietnam (27) (JICA’s World 2013: 5). At the centre are Vietnam and the Philippines which take the strongest position against Chinese territorial claims. Indonesia as the largest state among ASEAN is also targeted, but Jakarta – particularly under the new president Joko Widodo – is much more aloof and has only recently become more willing to publicly confront China on its SCS policies regarding fishing (Cochrane 2016).

37 This term is defined by the International Maritime Organisation as follows: “The effective understanding

of any activity associated with the maritime environment that could impact upon the security, safety, economy or environment.”, www.imo.org/blast/blastDataHelper.asp?data_id=29093&filename=1367.pdf.

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Since Fiscal Year 2012, the Japanese Ministry of Defence runs the Capacity Building Support programme for nine Asia-Pacific countries which includes the littoral countries Indonesia, Malaysia, the Philippines and Vietnam. Initially it focused on providing technological assistance for road construction and vehicle maintenance, but since China declared its new ADIZ in the ECS in November 2013, it also includes the organisation of seminars on aviation security and the international aviation laws for senior military officials for the littoral countries (Sonoyama 2015).

With the passage of the security laws in September 2015, Japan’s military forces were authorized for the first time to come to the assistance of countries under attack if those attacks also threaten Japan. When debating the legislation in 2014, Prime Minister Abe declared in the Japanese parliament that sending Japan’s military to exercise collective self-defense right, when a military conflict occurs in the South China Sea, would depend on the situation but as of now he did not deem existing territorial disputes between China and Southeast Asian countries as cases where the new rules could be applied.38

7.1 Philippines

The bilateral security relationship with the Philippines is currently the most advanced although it is not yet clear whether the new president Rodrigo Duterte will continue the strong stance on the SCS against China taken by his predecessor Benigno Aquino and how he will operationalise the outcome of the Philippine-initiated court case against China before the Arbitral Tribunal. Already in September 2011, Japan and the Philippines elevated their bilateral relationship to a “Strategic Partnership” which was further elevated to a “Strengthened Strategic Partnership” at the latest summit meeting in June 2015. The Action Plan to implement this new relationship envisages the conclusion of an agreement on the transfer of defence equipment and technology, expansion of bilateral and multilateral trainings and exercises for capacity building of the Philippine armed forces, and acquisition of patrol boats for the Coast Guard (Ministry of Foreign Affairs 4 June 2015). At a press conference during his visit to Manila in June 2013, Defence Minister Onodera Itsunori expressed very clearly Japan’s strategic support as well as his perception of the linkage between the SCS and the ECS disputes:

“We agreed that we will further co-operate in terms of the defense of remote islands […] the defense of territorial seas as well as protection of maritime interests […] We face a very similar situation in the East China Sea of Japan. The Japan side is very concerned that this kind of situation in the South China Sea could affect the situation in the East China Sea.”39

38 Jiji Press, 15 July 2014 (the articles quoted from the website of Jiji Press are no longer accessible but

available from the author; all dates of the articles are the dates of access). 39 Japan Today, Japan Vows to Help Philippines in China Sea Dispute, 28 June 2013 (the articles quoted

from the website of Japan Today are no longer accessible but available from the author; all dates of the articles are the dates of access).

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In the meantime, summit meetings and visits by other government officials, notably of the Self Defence Forces have increased. In January 2015 a memorandum on “Defence Cooperation and Exchanges” was signed between both ministries of defence (Ministry of Defense 29 January 2015). At the summit meeting in June 2015, the two sides agreed to start talks on the sale of Japanese defence equipment to Manila and an agreement was signed in February 2016 (Cruz de Castro 2016).40 Tokyo promised already in July 2013 the delivery of 10 patrol boats for the Philippine coast guard through a loan agreement which will use ODA funds. President Aquino had stated that the US as well as Japan will be given access to the Subic naval base. However, the delivery of the ships has been considerably delayed because of construction delays and the own needs of the Japanese coast guard for ECS patrols. Whereas there was talk of 12 ships in 2012 (as the Philippines had requested), the number is now down to 10.41 In February 2016 a keel laying ceremony was held in Yokohama and the first vessel referred to as multi-role response vessels (MRRV) is to be delivered to the Philippine coast guard in September 2016 (Desiderio 2016). In May 2016 Japan decided to lease up to five TC-90 military training aircraft to the Philippine military to patrol the SCS, including training pilots and aircraft mechanics. The TC-90 is capable of flying some 1,900 kilometres (1,180 miles), roughly double the flight range of the Philippine navy’s aircraft.42

Finally, mutual visits and joint military exercises are increasing. In October 2014, four SDF officers had observer status for the first time in a joint Philippine-US combat training exercise (PHIBLEX) that simulated seizing an island under attack by enemy forces.43 In the past, Japan and the Philippines had started to engage in disaster and relief exercises. In 2015 alone there were two such disaster relief exercises between the two countries, one in June which involved a P3-C of the Maritime Self-Defense (MSDF) and which took place 140 km northwest of Palawan in the SCS Cruz de Castro 2016). It was noticed in the press that the P3-C flight was near or possibly over the Reed Bank which is claimed by China and the Philippines.44 Most recently, in April 2016, three MSDF vessels,

40 Asahi Shimbun, Japan, Philippines to Step up Security Ties to Deter Chinese Expansionism, 5 June 2015

(the articles quoted from the website of Asahi Shimbun are no longer accessible but available from the author; all dates of the articles are the dates of access).

41 Yomiuri Shimbun, Beef up Maritime Security by Boosting Aid to S.E. Asia, 7 April 2012 (the articles quoted from the website of Yomiuri Shimbun are no longer accessible but available from the author; all dates of the articles are the dates of access).

42 Asian Times, Japan Agrees to Lease Five TC-90 Military Training Aircraft to Philippines, 3 May 2016 (the articles quoted from the website of Asian Times are no longer accessible but available from the author; all dates of the articles are the dates of access).

43 Asahi Shimbun, SDF Observes Island Defense Exercise in Philippines, Aimed at Countering China, 3 October 2015 (the articles quoted from the website of Asahi Shimbun are no longer accessible but available from the author; all dates of the articles are the dates of access).

44 Japan Times, Japan, Philippines Hail Second Day of Joint Drills in South China Sea, 24 June 2015 (the articles quoted from the website of Japan Times are no longer accessible but available from the author; all dates of the articles are the dates of access).

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two destroyers and a submarine, visited Subic Bay, the former American base in the Philippines, and conducted exercises with its Philippine counterpart.45

7.2 Vietnam

Security relations with Vietnam have also shown a rapid increase despite Vietnam’s communist regime and its cautious balancing acts in its troubled relationship with China. In contrast to the Philippines, China takes a more lenient position on Vietnam which tries to juggle relations with all the great powers.46 There is an intensive Japan-Vietnam high-level exchange of political leaders: In 2013, Abe chose Vietnam as his first destination for an overseas trip. In September 2013, Defence Minister Onodera Itsunori was the first foreign defence official to be invited to visit the former Soviet Cam Ranh Bay base. Vietnamese President Truong Tan Sang paid a visit to Japan in 2014 as a state guest. During the latter encounter, the two countries agreed to upgrade the existing “Strategic Partnership” to an “Extensive Strategic Partnership for Peace and Prosperity in Asia”. In September 2015 Communist Party chief Nguyen Phu Trong visited Japan. There exists now a Strategic Partnership Dialogue at the vice-foreign minister level and other foreign policy-related fora. In May 2015, the Air Self-Defense (ASDF) Chief of Staff Gen. Harukazu Saito met Senior Lt. Gen. Do Ba Ty, chief of the general staff of the People’s Army of Vietnam and vice minister of national defence, in Hanoi. In October 2015 both sides agreed on a visit by the Maritime Self-Defense (MSDF) in Cam Ranh Bay which Tokyo wants to use in future more often as a stop-over port on the way to the anti-piracy operation off the African east coast (Collin 7 October 2015). The first MSDF ships made port calls in April and again in May 2016 (Sasaki 2016).

In addition Japan is helping Vietnam to build up its maritime law enforcement agencies (Ministry of Foreign Affairs 18 March 2014). Japan promised Vietnam already in 2014 to donate six second-hand patrol boats, two of which were formerly in the service of the Japanese Fisheries Agency. After overcoming various delays, the first modified boat was finally delivered in August 2015, followed by the second one in September (Collin 7 October 2015; Kameda 2015).47

7.3 Malaysia and Indonesia

With Malaysia, Japan has only since 2015 a Strategic Partnership but is also helping the country with capacity building of its coast guard, the Maritime Enforcement Agency

45 The Yomiuri Shimbun, MSDF Vessels Call at South China Sea Ports, 4 April 2016 (the articles quoted

from the website of Yomiuri Shimbun are no longer accessible but available from the author; all dates of the articles are the dates of access).

46 See for example Luo 2015. 47 Japan Times, Abe’ Hollow Diplomacy, 5 August 2014 (the articles quoted from the website of Japan Times

are no longer accessible but available from the author; all dates of the articles are the dates of access).

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(Ministry of Foreign Affairs 25 May 2015). A memorandum of cooperation between their ministries of defence is pending with plans for the sale of defence equipment. The security relationship may become closer as Malaysia has started to react more strongly to the presence of Chinese coast guard vessels around various SCS features which are claimed by Malaysia, and with disputes over Chinese fishing in what Malaysia claims to be its EEZ.48

Indonesia as the most populous country with its regional leadership ambitions is a key country for Japan’s South East Asia policy, be it politically, economically or militarily. Although officially, as we have seen above, Indonesia and China assert that they do not have a territorial dispute in the SCS and China recognizes Indonesia’s sovereignty over the Natuna Islands which is in the proximity of the 10-dash line, the Indonesian government does not recognise the legality of the 10-dash line and disputes China’s claims for “historical rights” of fishing in what Indonesia claims is its EEZ which partly overlaps with China’s line (Cochrane 2016). Against this background and Japan’s and Indonesia’s common interest in anti-piracy, Japan has been providing concrete support for Indonesia for some time. Already in 2007, Japan offered Indonesia three patrol vessels, each newly built and measuring 27 meters, under a bilateral agreement that they would be used exclusively against pirates in the Strait of Malacca, terrorists, smugglers and other criminal elements at sea. In this way, Japan could use ODA funds which originally could not be used for security purposes.49 In 2006 a Strategic Partnership was agreed between both countries. In March 2015, a memorandum was signed between both ministries of defence on “cooperation and exchanges in the field of defence” (Ministry of Defense 23 March 2015; Pajon 2013: 22). In the same month, the summit meeting between Prime Minister Abe and President Joko Widodo resulted in a joint statement which was interestingly titled “Towards further Strengthening of the Strategic Partnership Underpinned by Sea and Democracy” which responded to Indonesia’s new emphasis on its surrounding sea as well as Abe’s interest in the peaceful resolution of conflicts on the basis of international law. On the same occasion the relationship was upgraded to the level of “Strategic Partnership” (Ministry of Foreign Affairs 23 March 2015). In December 2015, Japan established “two-plus-two” security talks with Indonesia, the first such forum with a member of ASEAN, and both sides agreed at its first meeting to start negotiations on an agreement to transfer defence equipment and technology (Ministry of Foreign Affairs 18 December 2015). In March 2016 it was decided to send SDF and Coast Guard personnel to Indonesia to help enhance the country’s naval capabilities.50

48 On Malaysia’s territorial claims see Vuving 2016. On Malaysia cautious position towards China see

Kreuzer 2015. Concerning fishing disputes with China see Malay Mail Online, Minister Assures Presence of Chinese Coast Guard Ships on Sarawak Waters Under Control, 13 February 2016, http://bit.ly/29sOeIe.

49 Asahi Shimbun, Japan Coast Guard Vessels and Equipment in High Demand in S.E. Asia, Africa, 30 September 2013 (the articles quoted from the website of Asahi Shimbun are no longer accessible but available from the author; all dates of the articles are the dates of access).

50 NHK, Self-Defense Forces to Support Indonesian Navy, 14 March 2016 (the articles quoted from the website of NHK are no longer accessible but available from the author; all dates of the articles are the dates of access).

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7.4 Cooperation with Australia and India

Although neither country is a SCS littoral country nor is supporting any territorial claim in the SCS, the increasing defence cooperation between on the one hand Australia and India and Japan on the other is very much motivated by a joint interest in the security of the SCS. At the same time the US is a strong security partner of Australia and Japan, wanting to involve both on its side in the SCS. As we will see in the following, one main US objective is to somehow involve all three partners in some kind of air and/or sea patrols. India has more recently become associated with some of the efforts of these three countries to maintain stability in the SCS in the face of China’s assertiveness. As a result we can observe bilateral, trilateral (Japan, Australia, US) as well as quadrilateral (Japan, Australia, US, India) security cooperation which often related to SCS issues (O’Rourke 2016).

Since 2002, Japan has held with Australia and the US ministerial meetings, and since the Japan-Australia Joint Declaration on Security Cooperation, there has been a qualitative and quantitative expansion of defence links, annual meetings between foreign and defence ministers, and deepened military cooperation. The 2010 Japan-Australia Acquisition and Cross-servicing Agreement and Information Security Agreement gave the bilateral security relationship an even deeper legal and institutional foundation, followed in July 2014 by the Agreement Concerning the Transfer of Defense Equipment and Technology (Liff 2016: 22; Ministry of Foreign Affairs 8 July 2014). The security of and the Freedom of Navigation in the SCS is an important issue in all fora and institutional links and is bound to become even more topical. However, at the same time Australia has considerable political and economic interests in a smooth relationship with China which will restrain Australian support for Japan’s role in the SCS.51

8. Japan-US: Japan as “Assistant Balancer”?

The increased Japanese involvement in the security of the SCS has been very much promoted by the US through various new bilateral defence policy agreements. In a joint vision statement on 28 April 2015, President Barack Obama and Prime Minister Shinzo Abe, when referring to the new Guidelines for Japan-US Defence Cooperation, said that both countries will “work more closely on issues including maritime security, and to partner with other countries that share our aspirations, in the region and beyond”.52 These new guidelines issued on April 27, 2015, mentioned that both countries will cooperate on maritime security and “Partner Capacity Building” (Ministry of Defense 27 April 2015). A key slogan used in this document is “enhancement of maritime domain awareness”. 51 For a discussion of these conflicting interests see Walton 2016. 52 The White House, Office of the Press Secretary, U.S.-Japan Joint Vision Statement, 28 April 2015,

http://bit.ly/2cte9CV.

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In order to deter China from coercing the other disputants to concede to its demands, the US has enhanced its Freedom of Navigation Operations (FONOPs) since 2015.53 China features as an object of annual US FONOPs since 2007, but was only targeted once between 1997and 2006.54 In its quest to achieve more burden sharing with its security partners and allies in the region, several US officials have mentioned the desirability of Japan to participate in naval or maritime patrols in the SCS: In January 2015, Vice Admiral Robert Thomas, commander of the U.S. 7th Fleet, welcomed Japanese air patrols (Kelly/Kubo 2015). In June 2015, Admiral Harry Harris, Commander of the US Pacific Fleet, gave a cautious and indirect welcome to such an idea by saying “I welcome the opportunity to work closely with the Japan Maritime Self-Defense Force ships and aircraft and the Air Self-Defense Force aircraft, throughout the region”.55 So far the Japanese government has been cautiously welcoming the US position and expressed the intention to consider the dispatch of the SDF. Defence Minister Nakatani Gen declared in the Japanese Diet in August 2015 that joint Japan-US surveillance in the SCS should be considered under Japan’s new security laws.56 His comment was made when a leaked internal document of his ministry suggested that Japan should consider providing support to US forces in the SCS.57 Earlier Katsutoshi Kawano, chief of the Joint Staff of the SDF, said in an interview to the Wall Street Journal “We don’t have any plans to conduct surveillance in the South China Sea currently but depending on the situation, I think there is a chance we could consider doing so”.58 At his meeting with Obama on 19 November 2015 in Manila, Japanese Prime Minister Shinzo Abe expressed strong support for the US position in the South China Sea and stated that his government would consider dispatching the Japan Self-Defense Forces to the South China Sea.59

These above remarks were eagerly taken up by some media outlets, but they seem to have been more a warning to China not to go too far. Such regional air or maritime patrol missions seem for the time being a remote prospect since they would require a much

53 For an American position on this issue see Odom 2016. 54 Email from Peter Kreuzer, 6 July 2016. 55 Asahi Shimbun, Commander of U.S. Pacific Command: “U.S. Reserves Right to Withdraw RIMPAC

Invitation to China”, 15 June 2015 (the articles quoted from the website of Asahi Shimbun are no longer accessible but available from the author; all dates of the articles are the dates of access).

56 Jiji Press, Surveillance in S. China Sea Should Be Considered: Japan Defense Chief, 19 August 2015 (the articles quoted from the website of Asahi Shimbun are no longer accessible but available from the author; all dates of the articles are the dates of access).

57 Asahi Shimbun, Once Again, Abe’s Disdain For the Diet And the Public is Evident, 20 August 2015 (the articles quoted from the website of Asahi Shimbun are no longer accessible but available from the author; all dates of the articles are the dates of access).

58 The Economic Times, Japan May Consider Joining US Forces in South China Sea Patrols: Military, 25 June 2015 (the article quoted is no longer accessible but available from the author; the date of the article is the dates of access).

59 I acknowledge gratefully this information from Dr Kim Tongfi, PRIF. Kyodo, Japan to Mull SDF Dispatch to S. China Sea: Abe, 20 November 2015 (the articles quoted from the website of Kyodo are no longer accessible but available from the author; all dates of the articles are the dates of access).

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more coherent policy by the littoral states in the face of vociferous Chinese opposition to any Japanese political, let alone military involvement in the SCS. The littoral states are therefore concerned about China’s reaction and their own capacities. A recently made proposal for an Asian Multirole Patrol Aircraft Coalition by Waguri Hiroshi of the Japanese Defence Ministry tried to make such a Japanese involvement politically less delicate but the author accepted the above concerns (Waguri 2015). It is, however, noteworthy that according to a poll in November 2015, 52.7% of Japanese respondents agreed with the dispatch of the SDF to the SCS for “cautionary surveillance” (keikai kanshi), with 39.9% opposing it.60 However, there are also operational limitations on such a Japanese involvement because the Japanese military is already overstretched with its patrols in the ECS and Chinese retribution could easily make these tasks even more difficult.

In the interim, Japan tries to show support for a greater military presence in the SCS by making use of the regular transit of its MSDF ships and patrol aircraft (P3C) between the east coast of Africa and Japan. Ships and aircraft are relieved every three months and have to stop over in between for refueling. While in the past Singapore and Thailand were the main stop-over countries, they are now those countries more directly involved in the disputes like Vietnam, Philippines and Malaysia. These stop-overs are also used for defence exchanges and exercises.61 Still, it is hard to imagine that Japan will soon follow its security partner Australia which has been conducting FONOPs in the SCS for some time (Greene/Birtles 2015).

9. Conclusions

Japan’s policy towards the SCS is part of a wider political, economic and military rivalry with China which ranges from competition over the shaping of economic and political regionalism to protecting the freedom of navigation. Prime Minister Abe’s “proactive peace diplomacy” is clearly inspired and driven by this narrative of China as a competitor and security challenge. As shown in Chapter 5, Japanese companies have important interests in the hydrocarbon resources in the SCS, notably within the EEZ of Vietnam, Malaysia, Indonesia and Brunei, which creates a potential security dilemma because some of the oil and gas fields are within or at least near China’s unclear 10-dash line. To preserve its economic, political and security interests in the region, Japan has embarked on a multitude of multilateral and bilateral policies although the latter seem now to enjoy greater preference. Their aim is to support ASEAN’s economic, political and military resilience and cohesion. Although Japan’s security-related policies towards the littoral states of the SCS are still limited to military and coast guard exchanges, capacity-building, 60 Kyodo News poll, quoted by Michael Cucek in his blog on 1 December 2015, http://shisaku.blogspot.nl/. 61 Yomiuri Shimbun, MSDF to Cover More of South China Sea, 10 January 2016 (the articles quoted from

the website of Yomiuri Shimbun are no longer accessible but available from the author; all dates of the articles are the dates of access).

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observation of military exercises, or the conduct of coast guard exercises, the military aspect may become more pronounced over time, propelled by China’s assertive SCS policies and by Prime Minister Abe’s stronger security policies which aim at a wider regional security role for Japan. The consequences of a deepening military relationship with the US, the linkage made between the threat perception of developments in the ECS and the SCS, and concern about US support for Japan’s interests in the ECS reinforce this military aspect. As outlined in Chapter 7, the coastguard organisations of the littoral countries are weak and Japan’s provision of coast guard vessels, and surveillance aircraft as well as training make a considerable difference although this support can only be very relative in view of China’s overwhelming coast guard force.

However, there are political difficulties and costs in implementing Japan’s comprehensive policies towards the SCS, apart from enhanced security involvement being hindered by Japan’s still powerful pacifism, constitutional restraints and budgetary limitations. Moreover, even strengthening coast guards may not necessarily enhance regional stability as some authors have pointed out in view of China’s maritime militia (Erickson/Kennedy 2016).

First of all, despite Japan’s encouragement to forge a common position of the territorial claimants concerning a binding set of behavioural regulations, such as through the planned binding Code of Conduct, the latter have different positions on the territorial issues and how to proceed, notably in view of maintaining good relations with China. Among the littoral states of the SCS there are divergences on maritime security priorities (smuggling, piracy, illegal fishing), apart from securing maritime borders or territories. The strong belief in “exclusive sovereignty” is a brake on coordination and cooperation even among the littoral states. Leadership change can unexpectedly alter national policies as the presidential elections in the Philippines in 2010 and then again in 2016 have shown. Consistency of national policies towards China is sometimes difficult to fathom or to work with for outsiders: Malaysia, which recently has become more vocal about its opposition to China’s fishing activities within Malaysian-claimed EEZ and is militarily becoming more prepared to protect its maritime interests, nevertheless offered China’s navy in November 2015 the Kota Kinabalu port as a stop-over location, the base of Malaysia’s only two submarines (Wade 2015; Rahmat 2015). If therefore Japan pushes the littoral states too hard, or emphasizes too much military means to resist China, some of the claimants might take their distance to Japan’s policies, or it may lead to differences among the claimants becoming more explicit (Sataka 2016).

Secondly, coordination and cooperation with the US will not always be smooth, in particular in view of current isolationist urges as became apparent in the presidential election campaign. There are subtle differences between Japan and the US in emphasis of what region is more important and where/how to deploy limited resources: Japan’s focus is primarily on Northeast Asia and notably the ECS, whereas the US has a global perspective and the SCS is considered particularly important. The US has always greater expectations of the scope of Japan’s contributions than Tokyo is willing to consider as the various US statements on Japanese participation in naval and air patrols have shown. As

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much as Japan’s new security legislation is welcomed by the US, there are also doubts on how far Japan will follow through with it.

There is also danger that Japanese assistance, in cooperation with the US or on its own, might encourage one of the SCS claimants other than China to act provocatively and raise tensions. Pajon mentions the case of the Philippines which sent its newly acquired second-hand US frigate to monitor Chinese fishing vessels in Scarborough Shoal in April 2012 which showed Manila’s willingness to escalate the confrontation with China (Pajon 2013: 33).

Finally, there is China’s strong opposition to any country outside the SCS to oppose its advances in the region. China can easily undermine Japan’s (and other concerned countries’) warnings and coalition building against Chinese actions in the SCS by pointing out that it does not inhibit the Freedom of Navigation which is largely true – for the time being. However, in the absence of agreed EEZ borders and increasing fishing disputes among almost all littoral countries, China’s build-up of its coast guard and maritime force in the SCS gives rise to concern. Particularly worrying is the construction of facilities on the newly created islands which China declares as being only “light armament” and supposedly serving the safety of navigation in the region, apart from China’s legitimate defence needs. The possible future introduction of radar, fighter aircraft and anti-ship/anti-air missiles or the establishment of an ADIZ could then easily be explained by China as a reaction to preventive measures by the US and its allies.

China is obviously irked by Japan raising the SCS issue in international fora like the G7, G20, or APEC.62 In its statements directed against Japan, Chinese officials have not hesitated to remind the world of Japan’s former occupation of the SCS and to declare that China is on “high alert against Japan’s attempt to return to the South China Sea through military means”.63 A Chinese scholar commented in the Global Times that joint patrols will help Japan with its American ally, and “help distract China’s strategic and tactical attention from the Diaoyu Islands dispute and alleviate the pressure on Japan” (Li Kaisheng 2015).

Other attempts to put pressure on Japan to abandon its involvement in the SCS is to make high level exchanges with Japan (such as a planned visit by Abe to China in 2016), the general improvement of the bilateral relationship, or the finalizing of discussions about a communication system during emergencies in the ECS, contingent on Japan’s “reasonable” behaviour concerning the SCS (Sun 2016; Li Kaisheng 2015).64

62 Foreign Ministry Spokesperson Hong Lei’s Regular Press Conference on 13 November 2015,

http://www.fmprc.gov.cn/mfa_eng/xwfw_665399/s2510_665401/2511_665403/t1314671.shtml. 63 Foreign Ministry Spokesperson Hong Lei’s Regular Press Conference on 7 March 2016,

http://bit.ly/2a0q22S. 64 NHK, China Blames Japan for Delayed Maritime Hotline, 29 June 2016 (the articles quoted from the

website of NHK are no longer accessible but available from the author; all dates of the articles are the dates of access).

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There are signs that China is using heightened tensions in the ECS to deter Japan in the SCS. As shown in Chapter 4, Japan supports the other littoral countries albeit not their territorial claims because it hopes that this will improve its political position against China in the ECS while at the same time deepening the military alliance with the US to strengthen its military position. China’s pressure on Japan in the ECS indirectly puts pressure on the US which does not like to get involved in the territorial dispute of the Senkaku/Diaoyu Islands. The developments of Chinese naval movements in the ECs, the record number of Japanese scramble activities against Chinese aircraft over the ECS, China’s continuous expansion of oil and gas resources in the East China Sea while EEZ borders are not yet agreed upon, in addition to the regular Chinese coast guard patrols around the Senkaku/Diaoyu Islands, have been partly attributed by observers in Japan to China trying to deter Japan’s involvement in the SCS (Collin 7 October 2015; Ministry of Foreign Affairs 1 June 2016).65 Other conceivable countermeasures in future might be the obstruction of Japanese oil and gas companies in SCS areas which are disputed but where China so far has not yet used coercive means to enforce its claims.

Looking at this Japanese-Chinese action-reaction pattern against the background of US-China power competition, Japan’s strategic interests and the obvious willingness of the SCS littoral states to welcome Japan’s involvement to various degrees, how effective can Japan’s SCS policies under the banner of Abe’s Proactive Peace Diplomacy be evaluated? From a Chinese perspective, supporting the other claimants even without endorsing their territorial claims makes Japan a trouble maker. Unfortunately China’s assertive policies is perceived as not only challenging the territorial status quo, regional stability, international law, and the inadmissibility of coercive conflict resolution, but at the same time as challenging the existing distribution of power which is creating tensions and dangers. China’s denial of any legitimacy of involvement by Japan (as well as by any other concerned parties) is unhelpful. Whether the territorial status quo and the current distribution of power is fair or can remain as it is, is yet another issue which could not be discussed here. So far, Abe’s diplomacy has only led to China becoming even more adamant and forceful in the ECS as the August 2016 incident has shown when up to 14 Chinese government vessels entered either the Contiguous Zone or even the Territorial waters around the Senkaku/Diaoyu Islands to accompany over 200 Chinese fishing boats and to demonstrate China’s sovereignty of the islands as well as its dissatisfaction with Japan’s policy towards the SCS (Ministry of Foreign Affairs 8 August 2016; Deng 2016). All the time, China is reinforcing its territorial position militarily, politically and economically in the SCS. China’s downright refusal to abide by the Arbitral Award of 12 July 2016, even at reputational costs and encouraging the littoral countries to align more with Western countries like the US and Japan, shows that the application of Abe’s “proactive peace diplomacy” has so far not contributed to show the way to a compromise

65 NHK, ASDF Scrambles Against Chinese Planes Surge, 30 June 2016; Yomiuri Shimbun, New Provocation

by Chinese Navy Ship, 17 June 2016 (the articles quoted from the websites of NHK and Yomiuri Shimbun are no longer accessible but available from the author; all dates of the articles are the dates of access).

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in the SCS, but has on the contrary led to a deterioration of the confrontation in the ECS. Given the above mentioned three political difficulties, it seems that Japan can do nothing constructively for a reduction of tension in the SCS within the current framework of its alliance and political-economic interests, as well as against the background of China’s unyielding territorial stance and its tense relationship with China. In the end, the more determining factors for achieving regional stability in the SCS lie with the US-China relationship and the reactions of the other claimants to it.

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Abbreviations

ADIZ Air Defense Identification Zone

ADMM ASEAN Defence Ministers Meeting

AIIB Asian Infrastructure Investment Bank

ASEAN Association of Southeast Asian Nations

ECS East China Sea

EEZ Exclusive Economic Zone

FDI Foreign Direct Investment

FON Freedom of Navigation

FONOPs Freedom of Navigation Operations

IMB International Maritime Bureau

JOGMEC Japan Oil, Gas and Metals National Corporation

LDP Liberal Democratic Party

LNG Liquified Natural Gas

METI Ministry of Economy, Trade and Industry

MOEC Mitsui Oil Exploration Co

MRRV Multi-Role Response Vessels

MSDF Maritime Self-Defense

ODA Official Development Assistance

PHIBLEX Philippine-US Combat Training Exercise

PLA People’s Liberation Army

ReCAAP Regional Cooperation Agreement on Combating Piracy and Armed Robbery against Ships in Asia

SCS South China Sea

SDF Self Defense Forces (Japan)

SLOC Sea Lanes of Communication

UNCLOS UN Convention on Law of the Sea